Shenzhen, China: Because of the tumbling Yuan values, crude oil prices rose today, which causing concern over the Purified Terephthalic Acid Industry, as Purified Terephthalic Acid production depends on crude oil derivative Paraxylene, a source confirmed.

“The fluctuating of crude oil values everyday is bothering manufacturing units of its derivatives Purified Terephthalic Acid." This justification can be affirmed in the below explanation.

Purified Terephthalic Acid prices dropped in China, mirroring the upstream Paraxylene, which dropped by 1%. The crude oil market added flavour to the declining trend after declining to WTI Crude at USD 105.5/barrel on May 19. Manufacturers quoted that the market for Purified Terephthalic Acid is still in turmoil due to the oscillating crude oil market after some ease in lockdown. Reports also noted that in Shanghai, authorities have some relaxed restrictions and are anticipated to ease further, which would help boost the demand for Purified Terephthalic Acid in the domestic market.

From the demand side, downstream polyester industries are driven by the mixed sentiments from the consumer's end. In contrast, demand from the Polyethylene Terephthalate bottle industry remained volatile, with sporadic orders as the market in some provinces of China is still recovering.

The South China branch of Sinopec observed a hike in the rate of Paraxylene by USD 90/MT on May 18. Meanwhile, many production units like Hainan petrochemical and Sinopec Huazhong just started operating its unit post some relaxation in lockdown.

Today, Crude oil rebounded again, which may further impact the market for Paraxylene, ultimately pressurizing the Purified Terephthalic Acid industry. As per the sources, the inventory level is average, the production unit operating rate is above 50%, and the demand from the domestic as well as international market is gaining momentum after the improvement in supply.

Thus, ChemAnalyst's prediction says that "The market for Purified Terephthalic Acid is expected to be controlled by its feedstock Crude oil market, which is expected to remain high in repossession of growing demand in China post some relaxation in restrictions".